History

How We Lost the War on Poverty

Amity Shlaes concludes in her new book that grand governmental schemes to broadly reorder society are doomed to fail.

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Great Society: A New History, by Amity Shlaes, HarperCollins, 429 pages, $32.50

With John F. Kennedy's election to the presidency in 1960, Amity Shlaes recounts, Americans developed a growing urge for a "big change that blasted like a space rocket." By 1972, when the smoke from that rocket had somewhat cleared, they had acquainted themselves with the New Frontier, the Vietnam War, the moon landing, two landmark civil rights acts, Medicare, Medicaid, the New Federalism, the "urban disorders" of Watts and Detroit, and the severing of the last feeble tie between the dollar and gold. But it was President Lyndon Johnson's War on Poverty that gave the era the appellation of "the Great Society."

In Great Society: A New History, Shlaes describes the actors, events, and outcomes of those years. The book is a fast-moving and entertaining read, rich in interesting details and extraordinary in the author's marshalling of the history. Shlaes, an experienced journalist, has a gift for leading the reader through subjects that initially seem only marginally related, tying them together in the service of her narrative.

As one who lived through that era, most of it in Washington, I appreciate how Shlaes has shone her reportorial light into many fascinating corners and upon a marvelous and frequently flawed cast of characters. Besides Presidents Kennedy, Johnson, and Nixon, this cast includes poverty czar Sargent Shriver, his brother-in-law Bobby Kennedy, presidential wordsmith Richard Goodwin, United Auto Workers leader Walter Reuther, Fed Chairman Arthur Burns, radical activists Tom Hayden and Michael Harrington, California Gov. Ronald Reagan, Michigan Gov. George Romney, black power leader Nathan Wright Jr., and future senator Daniel Patrick Moynihan. (I had encounters with all of them except Shriver.)

The overarching theme of the Great Society was a massive social project announced by Johnson in a 20-minute address at the University of Michigan on May 22, 1964. He told the graduates that "far from crushing the individual, government at its best liberates him from the enslaving forces of his environment." His administration, Johnson said, had assembled "the best thought and the broadest knowledge to find answers to society's problems." Those answers would be implemented by a "fighting and aggressive" federal government dedicated to winning a war against poverty and against the "loneliness, estrangement, and isolation" that were its consequences.

"The men around Johnson," Shlaes observes, "felt the weight of this faith in them, and strove hard. Viet Nam would be sorted out. There would be a Great Society. Poverty would be cured. Blacks of the South would win full citizenship. The Great Society would succeed." There would be plans! Many plans! Measurements! Results! The federal government, led by a powerful and determined president advised by the best social scientists, would become the driving force for social change, as opposed to merely backfilling the shortcomings of capitalism.

And how did all this work out? Poorly, says Shlaes.

Shlaes' most compelling example contrasts a monumental public housing project in St. Louis called Pruitt-Igoe with an adjacent neighborhood development project called the Bicentennial Civic Improvement Corporation.

Pruitt-Igoe was a stark and stupendous complex of 33 high-rise apartment buildings for the poor, designed by rising architectural star Minoru Yamasaki. Begun in 1955, it was the delight of the urban planners of the '50s. But by the mid-'60s, it had become a decaying, dangerous, increasingly abandoned, and crime-ridden concrete wreck. Interpretations of Pruitt-Igoe's descent vary, but all agree that high-rise rental housing for the poor (or at least the nonelderly poor) turned out to be a very bad idea. Feeble attempts at rehabilitating parts of the project foundered. After resisting the embarrassment for years, the feds threw in the towel in 1972. The demolition was finished in 1976. Half of the site now hosts industrial warehouses; the other half became an unplanned urban forest, later bulldozed for commercial redevelopment.

By contrast, there was the Bicentennial project, literally in the shadow of a Pruitt-Igoe high-rise, inspired by Father Joseph Shocklee of St. Bridget's parish. Working with people of the Jeff-Vander-Lou neighborhood organization, Shocklee put together a team involving the gas company, the Pulaski Savings Bank, a few private donors, and a small-scale minority contractor. Starting in the mid-1960s, Bicentennial bought up vacant brick town houses for $600, found and counseled prospective homeowners, contracted for the rehab, and financed the sale with unsubsidized market-rate mortgages from Pulaski. Existing homeowners cooperated to help the new homeowners improve their education and job skills, find employment, and improve their new properties.

As Bicentennial scored successes with 80 new homeowning families, the appeal of home ownership for the working poor blossomed. Under the Federal Housing Administration (FHA) Section 235 mortgage insurance program, passed in 1968, mortgage brokers rushed to enroll low-income homebuyers. They offered nominal down payments, 40-year terms, and 1 percent financing. But the program relied on new construction, not the more troublesome rehab, and it favored large contractors to achieve the government's grandiose production goals (6 million housing units for low- and moderate-income families over 10 years).

The contractors had to pay FHA-mandated above-market Davis-Bacon wages to their unionized (and largely white) workforces. There was little time or inclination to prepare inexperienced homebuyers for ownership or to bring them into a supportive neighborhood organization. The result: brand new suburban-style split-level houses, purchase price $23,000—unaffordable even with the extreme subsidy terms. When a confused and fitfully employed buyer couldn't pay, the lender foreclosed, the FHA took the hit, and the buyer often departed with all the copper plumbing for resale. (This aftermath is not in the book.)

Shlaes is particularly insightful in describing the tribulations and failures of the Community Action Program (CAP), managed by the free-standing Office of Economic Opportunity (OEO). CAP, a radical departure in the history of federal programs, squeaked through the Democratic Senate on a 46–44 vote. The proposition was this: Uncle Sam would directly fund local organizations in poverty-impacted areas to plan, develop, and coordinate the many facets of Johnson's War on Poverty.

America's mayors did not like this one bit. Accustomed to managing federal funds for urban programs, the mayors regarded the activist groups—composed more often than not of minority citizens resentful of City Hall for its neglect, disrespect, and even oppression—as budding revolutionaries. This, they believed, was not just an affront to the mayors but also a federally funded recipe for revolution.

CAP also required "maximum feasible participation of the residents of the areas and the members of the groups." But participation in what? Making plans? Assenting to the plans of others? Hiring and firing? Dealing with City Hall? Coordinating multifarious other programs and organizations? As Moynihan pithily summarized: "The government did not know what it was doing."

The dream of mass participation wound up dissolving. Fifty years later, it would be a challenging task indeed to find a local CAP agency imbued with anything resembling the revolutionary themes of the 1960s.

Shlaes offers a fascinating, detail-rich re-enactment of President Richard Nixon's Camp David economic summit of August 15, 1971, which she describes as "one of the most impressive [collections of minds] in the history of economic policy." The impetus was a deteriorating international economic situation brought on by the excesses and misfortunes of the Great Society era: the costly and unwinnable Vietnam War, the interminable and conflict-ridden War on Poverty, the unrepaired wreckage from urban riots, a housing finance fiasco that eerily foreshadowed that of 2007, and the forced abandonment of any tangible link of the dollar to gold.

Nixon's Camp David summit produced at least a grudging acceptance of breaking the gold link, imposing wage and price controls, and enacting the first general tariff (10 percent) since Herbert Hoover's day. That all turned out badly. Shlaes, quoting Arnold Weber, notes that "almost everyone associated with the sweeping interventions…has recanted or admitted error."

 And that brings Shlaes to her trenchant conclusion. Quoting the economist Friedrich Hayek, she concludes that grand governmental schemes to broadly reorder society are doomed to fail. Public planners do not have adequate information from the grassroots, and they cannot collect information from a nonexistent price system. The Great Society program deserves to go down in U.S. history as a baneful example of a far-ranging, high-sounding, politically motivated experiment that turned out to be largely futile in achieving its hopes, proposed and carried out by theoreticians and planners who (to borrow from Moynihan) simply did not know what they were doing. With the notable exceptions of the civil rights bills, this was a sorry legislative era that festers in the memory of many people still living.

And what of Bicentennial? The former Pruitt-Igoe tenants had discovered a superior alternative to government housing aid, Shlaes writes. "With his small [private sector] housing program, Father Shocklee had shown that 'the poor' were more like the middle class than people supposed. They gained from something only when they had a chance to own it."

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37 responses to “How We Lost the War on Poverty

  1. So government creates more problems then it solves with massive intervention? Gee, if we just had a resent example of this so everyone would learn this lesson.

    1. The lesson that will be learned from the Coronapocalypse: The government needs to act quicker with more authoritarianism – for the children elderly.

      1. Bt aren’t we all children?

        1. I thought we were all Nancy?

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      2. What the hell is wrong with you? I know this is the internet, but you could show even a modicum of class. It’s called Coronageddon.

        1. Coronagate, anyone?

      3. pretty much. the only takeaway some people get when a government intervention fails is that the intervention should have been done in the exact same manner, only harder.

    2. The biggest aspect of all of this wasn’t mentioned — LBJ’s spending on both Vietnam and the Great Society is what caused the Stagflation of the Carter era.

      Spending like drunken sailors in response to the Wuhan Virus is going to cause serious economic issues in the near future — not just inflation but possibly hyperinflation….

  2. “How we lost the war on poverty.”

    Maybe because poverty is a subjective state. No matter how we attempt to objectively define the term, there will always be covetous envy at perceived inequalities. No amount of wealth redistribution is going to change this.

    1. I suspect that if we measured material living standards and physical health conditions, and compared families by income percentile today with the same percentiles in 1960, even the zealots of the LBJ era would declare that we defeated poverty.

      But advocates have not just moved the goalposts, they have declared that there are no physical goal posts. We now have measures not of concrete phenomena but feelings, e.g. food insecurity instead of hunger. And since feelings are both subjective and easily manipulated, we can never win the war.

      Its almost as if some people don’t want the poverty issue to go away. Why could that be?

      1. This guy gets it .

      2. Two replies that I give my children on a daily basis are: “life isn’t fair,” and “you don’t always get what you want.”

        If ever there were a politician that made either of those statements to his constituents, I might actually know what it’s like to feel excitement voting for someone.

        Alas, capitalizing on feelings of unfairness and victimization is just too profitable when dealing in the currency of votes.

        1. “you don’t always get what you want.”

          So you like Trump’s rally music?

          1. Don’t know; never been to/watched/listened to a Trump rally.

            If you’re talking about The Stones song, then yeah, good tune.

      3. We now have measures not of concrete phenomena but feelings, e.g. food insecurity instead of hunger.

        Which is ironic, because while you complain about people advocating for policy keyed to “feelings,” you yourself are advocating for policy based on your own feelings – i.e., on what “food insecurity” means.

        People who use the term “food insecurity” have a pretty concrete sense of what they’re talking about. They’re talking about how close a person is to not being able to get enough food. We can define that by the amount of money they have saved, the amount of money they earn, the cost of food, etc. It’s not about whether I “feel” safe about getting my next meal. It’s about whether the next one I have is the last one I have enough money for. Or if I can even afford another one.

        One might grant that “food insecurity” is a different metric than “hunger,” namely insofar as the person who is merely “food insecure” may have more food, and better access to food, than one who is actually “hungry.” But from a policy perspective, it makes sense to address both problems. People who are “food secure” don’t need private or public help. People who are “food insecure” are closer to “hungry” than they are to “food insecure,” in terms of how our policymaking should address them (if at all).

        1. “People who use the term “food insecurity” have a pretty concrete sense of what they’re talking about.”

          And both they as you are full if shit.
          Making up new ‘problems’ once real ones are solved proves lefty fucking ignoramuses are not worth shit.
          Fuck off, slaver.

        2. So what? If a “food-insecure” person never actually misses a meal, then we have eradicated hunger. Stop the bullshit.

        3. People who use the term “food insecurity” have a pretty concrete sense of what they’re talking about. They’re talking about how close a person is to not being able to get enough food. We can define that by the amount of money they have saved, the amount of money they earn, the cost of food, etc. It’s not about whether I “feel” safe about getting my next meal. It’s about whether the next one I have is the last one I have enough money for. Or if I can even afford another one.

          And “whether you can afford another meal” is relevant to what exactly? The real question is why you don’t have enough money in the first place, and in the US today, the reasons for that are self-inflicted and rooted in choices you have made.

          Furthermore, even if you don’t have enough money to buy your next meal, there are numerous charities and government programs that make sure you won’t starve.

          Food insecurity is a worthless concept, whether or not you can formally define it in monetary terms.

        4. There is no reason someone in this country should go hungry. The govt gives food stamps to needy people.

  3. “How We Lost the War on Poverty”

    Step 1: Define poverty in a way that makes it not only impossible to eliminate, but impossible to shift the numbers even a little.

    1a. Define poverty relative to median income. This way you don’t have to worry about economic growth eliminating or reducing poverty. A rising tide lifts the goal posts.

    1b. Exclude government transfer payments (welfare….) from the calculation of income. This way you could give poor people a million dollars each and officially, they will still be just as poor as they were before.

    1. Create millions of single mothers.

      1. Without the definitional issue I laid out, single motherhood would not create an unsolvable poverty problem.

      2. Destroy urban public schools.

      3. keep people already in poverty alive and breeding

  4. The same thing happens with international development for the same reasons. Sustainable change can only happen from the ground up. It must be driven by the people who will benefit from the changes–rather than initiated by the people writing the checks.

    One of the reasons China’s peasants prospered so much better than India’s over the last 20 years was that of all the stupid and horrible things the CCP did, they also taught every peasant child how to read and do some basic math. Those don’t seem like especially important skills to average Americans–you need to be able to do a lot more than that to get a good paying job in the United States–but from a peasant perspective, being able to read and do some basic math are basic requirements for factory work. When the United States industrialized, companies launched educational programs in their factories to teach the same skills to farmer’s kids for the same reasons.

    In India, conversely, the government concentrated their funds on creating some of the greatest mathematicians and computer scientists in the world–which did nothing for India’s peasants. When manufacturers look to countries other than China for various reasons, they don’t bother with India, so much, because although they have a large supply of relatively underutilized labor, that labor isn’t particularly useful if they can’t read signs or operating manuals, or they can’t add a half inch and an eighth of an inch together.

    When the war on poverty launched in 1960, the rust belt hadn’t yet become the rust belt, and it was manufacturers in Hong Kong, Japan, Singapore, South Korea, and Taiwan, rather than mainland China, that made the rust belt was it became–China just put the icing on that cake.

    From an anti-poverty perspective in the U.S., a marginal education is of no particular significance anymore if there are no manufacturing jobs for people of limited education. There are a billion former Chinese peasants who can read and do some math now. Our poor need to learn how to write well and do some calculus. They need to learn how to code, things like that, and that requires a commitment by parents and others in the community who may not get it. It has to come from the ground up.

    1. One of the best programs during the Great Society era for bringing exactly that level of commitment to getting poor kids an education and the other things they needed to be successful in school was ground-up initiated by the Black Panthers. They would invite all the local kids to one of their community centers before school, feed them a square breakfast to make sure they weren’t hungry, and then walk those kids to school under an armed escort to make sure they weren’t being dissuaded from going to school by fear of local bullies or gangs.

      Inspired by contemporary research about the essential role of breakfast for optimal schooling, the Panthers would cook and serve food to the poor inner city youth of the area. Initiated in January 1969 at St. Augustine’s Church in Oakland, California, the program became so popular that by the end of the year, the Panthers set up kitchens in cities across the US, feeding over 10,000 children every day before they went to school.[1]

      “The Free Breakfast Program became the central organizing activity of the group.[2] The reach and success of the program in so many communities underscored the inadequacies of the federal government’s then-flagging and underresourced lunch programs in public schools across the country. Many of these programs were held in predominantly black neighborhood but also served children of other ethnicity.[3] Despite its successes, Federal authorities attempted to discredit and derail the Free Breakfast Program. Among other actions, authorities raided breakfast program locations while children were eating[4].

      https://en.wikipedia.org/wiki/Free_Breakfast_for_Children

      Unfortunately, the Black Panthers may have financed their programs through bank robbery, etc., but if the federal government had emulated their programs–with the support of local charities–they may have found those programs were more effective than, say, school lunch programs. The police giving a mass of kids an armed escort to school after they eat a square breakfast at St. Anthony’s church, or wherever, would be vastly superior to SNAP benefits, free school lunch programs, and telling the kids to call the cops if anyone bothers them. And I’m not just talking about the Great Society era. I mean in places like Chicago today.

      1. The other thing is that the Black community valued education back then — the Black Panther leadership was adult Black males.

        The Black community of today, the adult Black males of today, do not value education and that’s a problem.

  5. “I had encounters with all of them except Shriver.”

    John throws down the cocktail party invite challenge to other Reason contributors

  6. The Great Society and related programs was intended by the Democratic Party to lift the black monority out of poverty, eliminate hunger and simply bring prosperity to a population in need. Equally important to the Democratic Party, it was perceived as a way to bring electoral prosperity to the Democratic Party for the forseeable future.

    The reality is, the black population was very aware of the Democratic Party’s motivation and they resented the quid pro quo that indentured black people to the Democratic Party by going along with the silent bargain…we will keep the money coming if you will give us your votes!!

    Black people had more dignity than the D’s thought and the black leaders knew the only way out of their predicament was to study hard, work hard, save all they could and hold their heads high. The Democratic Party denigrated the black community and black folks have long resented it. That’s the real legacy of the Democratic Party’s Great Society and countless other programs. You can’t expect give-a-way programs to solve a population’s problems without building in a way out of poverty. It’s just like the parable of the fish.

  7. No matter what the “plan” is – the underlying principle is always the same……
    – Dictate More (loose freedoms)
    – Steal (and pretend it’s not stealing by dismissing the factors of EARNED).

    1. Better said as …
      “the plan” is always GUN-THREATENING POWER = WEALTH….
      …instead of…
      CREATED VALUE = WEALTH

      Someday; there won’t be anymore created value to steal but they’ll probably just keep making “plans” until that horrid day presents itself.

  8. The war on poverty was lost the minute the government decided to harm people to fight it.

    Freedom yields prosperity, not the necessary evil of government which should be limited to dealing with criminals and foreign enemies.

  9. To do anything, first you need to be honest about the cause of poverty. Roughly 15% of the US population has an IQ below 85. No one in this group will ever be financially successful or consistently employed throughout their lifespan.

    Race, your parents economic status, where you live, and all of the other leftist talking points pale in comparison to this regarding financial success in life.

    Sure, smart people can make dumb decisions even over a long period of time, but dumb people make bad decisions all the time. And you cannot educate someone with an IQ of 75 out of this problem.

    I have no idea what the solution is.

    However, first as a society we need to have a very frank discussion about what to do with the 15% of our population that will never attain long term financial health based off of their own actions and behaviors. Until this happens, you can’t even begin to look at possible solutions.

    1. Subsidizing Dumb (giving it market value – thus encouraging it) certainly hasn’t been the solution. I’d like to think as long a people have the ability to learn and the laws don’t discourage that learning (i.e. commie education) we can all be smart enough to figure out that producing what other people desire/need is the key to wealth.

      I mean really; how “smart” was any of us at birth? We learned….

      1. TJJ, the problem is that when someone has an IQ of 85, or less, they are incapable of learning the required lesson. Traditional societies dealt with this by putting up a series of inflexible laws and cultural requirements and violently enforcing them as regarded personal behavior and requirements.

        The US cannot do this as a practical matter and will not do it as a legal matter.

        So how do we prevent the truly stupid from causing not only themselves, but others harm without infringing upon their Constitutional right?

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